KUALA LUMPUR (April 6): Datuk Seri Abdul Wahid Omar, Minister in the Prime Minister's Department in charge of Economic Planning, has come out to defend the new minimum wage of RM1,000 as a reasonable level under the current labour market, amid speculation there may be a spike in retrenchment prior to its implementation in July.

"I think if you take a step back, [and] look at what is the decent level for people to be paid, I don't think RM1,000 per month is unreasonable," Abdul Wahid told reporters after delivering a speech in the Association of Chartered Certified Accountants (ACCA) President's Debate 2016.

The decision was a deliberate decision on the part of the government after taking into consideration various factors and recommendations from a committee that consist of, among others, members from the Malaysian Employers Federation (MEF) as well as the labour union, he said.

Abdul Wahid is also of the view that if businesses felt the wage is too high, they can find ways to improve productivity or review their business model.

Prime Minister Datuk Seri Najib Abdul Razak had announced, during the tabling of Budget 2016, that the minimum wage for employees in Peninsular Malaysia will be raised by RM100 to RM1,000 per month, and from RM800 to RM920 for those in East Malaysia, effective July.

MEF executive director Datuk Shamsuddin Bardan had said last month that the number of people being retrenched may spike before July as the new minimum wage policy comes into effect, as employers look to cut their retrenchment cost in the current economic environment.

He had also shared that about 100 of the federation's members have approached it to find out what is the best practices involved when it comes to retrenching workers, and that most of these employers employed at least 50 workers.

Meanwhile, Abdul Wahid said the government continues to work at improving the country's fundamentals, which will sustain its trade surplus.

He was commenting on the Ministry of International Trade and Industry statement today, which showed that the trade surplus widened to RM7.35 billion in February from RM5.39 billion in January.

"We want to record trade surpluses, and we work hard to make sure our export continues to grow," he said, adding that the government has set up the National Export Counsel to ensure the country continue to register trade surpluses.

Earlier in his speech, Abdul Wahid said he is of the view that the current Association of Southeast Asian Nations (ASEAN) model is an appropriate one for the region.

"There is a big difference between ASEAN and the European Union (EU) model. The EU goes beyond the single market [to a] single currency, European parliament and court. But that was not the intention for ASEAN," he said.

Having said that, he said related parties can make ASEAN more effective by strengthening institutions under ASEAN, such as the ASEAN Secretariat, by contributing more funding and resources, to better drive initiatives.